I am Professor of Information Systems at IE Business School in Madrid (Spain). I graduated with a B.Sc. from Universidade de Santiago de Compostela, then got my MBA at Instituto de Empresa (Madrid, Spain), my Ph.D. in Management Information Systems from the Anderson School at UCLA, and conducted postdoctoral studies at Harvard Business School. My research interests are related to the impact of disruption and technology at three levels of analysis: individuals, organizations, and the society as a whole. I’ve been teaching and consulting in the technology field since 1990. Besides that, I am a frequent contributor and columnist in business and economic newspapers and magazines, I participate in different technology startups, and I write on a daily basis since 2003 in my page in Spanish, enriquedans.com, one of the most popular technology blogs in Spanish, and in English on Medium.

Do You Have A Data Strategy?

The ongoing digitalization of our environment has created a vast amount of data about just about every aspect of what we get up to. Every page we visit, every click, every search engine term, every purchase is recorded in a log file and associated either with our online identity if we have logged in, or in a system that saves our session through cookies or digital fingerprinting.

IMAGE: Alphaspirit – 123RF

And we don’t just generate data from our computers. More and more of us use devices that establish where we are and where we have been, as well as information about physical activity and health. Using a cellphone regularly means affirming that we have read the terms and conditions of an app we have just downloaded (which is almost never likely to be true, given the legalese they are written in and their length), which can allow the app developer to set off sensors to monitor our movements, as well as the ambient noise and temperature around us, as well as using a gyroscope and three-dimensional accelerometers to measure humidity, light, or the phone’s distance from our body.

Devices such as Fitbit, Jawbone Up, Misfit Shine, and others can measure how many steps we have taken or steps we have walked up, what physical activity we’re engaged in, and even, when connected to a scale, our weight and body mass index. By pressing a tiny device like Scanadu Scout against our temple, it can tell us in 10 seconds our body temperature, blood pressure, breathing and heart rate, oxygen level in our blood, pulse, and stress, and then store all that information in the corresponding app.

Smartwatches, which growing numbers of people are now wearing, can measure body temperatures, pulse, etc. At its latest developers’ conference, AppleApple, which is rumored to be about to launch an iWatch that will have a strong health component, unveiled a platform that can integrate all the information generated by our wearable devices, allowing it to be used by medics and other providers of health and wellbeing services.

And then there is the smart home, another data generator that can control temperature, security, lighting, and even tell us when we’re running out of our favorite ice cream through a range of devices such as Nest, Canary, PhilipsPhilipsHue, Amazon Dash, and many others. The downside to this is that the companies providing these services will know ever more about us: more than we might imagine.

Many companies now see using the data that their users generate as a way to increase their value proposal. The idea is a tempting one: knowing your clients can provide a sustainable competitive advantage, allowing you to offer your service or product in a way the customer can adapt to, which in turn can create a positive bias on the basis of that adaptation, and make it difficult for the competition to match. New tools that dramatically reduce the barriers to entry into sophisticated machine-learning analytics are also fueling the trend.

But the difference between those companies carrying out these kinds of practices well, and those that do so badly, can be notable. Which is why the right data management strategy is so important: it’s not about gathering a huge amount of useless information, and much less is it about alienating the client through NSA-style practices. The questions we need to be asking are: what data do we really need? What is the minimum amount of data overall that we need to generate, how much should be generated by asking the client, and how much from extrapolating it from the use the client makes of our product or service? And what do we want this data for? Do we intend to exploit it so as to improve our value proposition to the client; or is it so as to hassle him or her more efficiently; or is it to sell the data to third parties, even though we don’t know what they are going to do with it? Are we going to treat the data in some way? Are we going to hide what we know from the client, how are we going to use it and who are we going to share it with, or will be try to be as transparent as possible, and then respect whatever decision the client makes about the use of his or her data? And above all, how are we going to manage the complexity that this new scenario will generate?

Orienting your company toward managing your clients’ data so as to increase your value proposition must be the result of serious and careful consideration. Users are starting to understand the value of the individual or collective information they generate, and are now demanding part of that value: collecting data surreptitiously, without explaining why could end up harming your company’s reputation.

Not looking after data properly can also generate negative press, and being seen as irresponsible is not the best way to do business. A minimalist approach is required toward data collection: only that which is strictly necessary, and always explaining the whys and wherefores, as transparently as possible.

The difference between being seen as an ally that provides me with a better service or a sinister spy prepared to follow and hassle me with sales calls when I’m having dinner is a fine one, and depends on factors such as transparency and letting customers know what we’re doing with the information. I could name any number of companies that know more about me than I do, and yet I’m not remotely worried… but there are others that have just a little information about me and that, because I shared that data with an irresponsible company, I now find myself being hassled and wishing I had never met them in the first place.

These are issues that require expert management and a strong sense of responsibility. The appearance of executive positions such as Chief Data Officer is no coincidence: they are a requirement for companies working in an environment that is ever-richer in information. We need people able to design an acquisition, treatment and data use strategy, and who are aware of the potential of advanced analysis, but who are also able to put themselves in the client’s position. If we still don’t have a strategy for this key area of our business and person responsible for applying it, then we need to start thinking seriously about how to do so.

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